Z58 

A? 

1876a. 


Argunent , . ,  tie  fore  the 
Gommittee  on  the  Judiciary 

by 
Edgar  F,  Brown 


■^-.^:'^: 


ARGUMENT 


OF 


EDGAR  F.  BROWN, 


BEFORE    THE 


Committee    on    the   Judiciary 


OF     TIIK 


House  of  Representatives,  at  Washington, 

Jaxuaky  28x11,  1870, 
ON     BEHALF     OF     CERTAIN 

Claimants  under  the  Geneva  Award. 


NEW    YORK: 

p.  P.  McBREEN,  Pkinteh,  14  &,  16  ANN  Stkeet. 


4:- 


AKGU3IENT     BY     EDGAR    F.    BROWN 

Befokk  the  Committee  on  the  Judiciahy  of 
THE  House  of  Repeesextatives  at  Wash- 
ington, January  28,  1876,  on  behalf  of 
Claimants  to  the  Fund  paid  by  Great 
Buitain  to  the  TTn^ited  States  ukder 
THE  Geneva  Award. 


J//'.  Chairman  and  Gentlenien  of  the  Coinmiitee: 

k3       I  have  listened  with  interest  to  the  arguments 

which  liave  been  made  before  yon  on  behalf  of  the 

V  various  claimants  to  the  fund  paid  by  Great  Britain 

^   to   the   United   States   under  the  Geneva   Award. 

\    These  claimants  have  arranged   themselves   under 

^  two  classes,  the  one  asking  to  be  indemnified  for 

^   achial  losses  sustained^  and   the  other  to  receive 

*^  about  five  millions  of  dollars  which  is  to  be  added  to 

"^  profits     already     received,     growing    out    of     the 

^  hazard  of  insuring  owners  of  vessels  and  cargoes 

^'  against  loss  ])y  the  so  called  "confederate  cruisers" 

-  during  our  late  civil  war. 
^  It  is  apparent  that  all  persons  who  have  received 
^  no  remuneration  for  their  losses  are  entitled  to  be 
, first  ])Mid  from  this  fund,  unless  a  special  trust  or 
interest  attaches  to  it  in  favor  of  the  underwriters 
as  insurei-s,  who  have  been  large  gainers  by  the 
I  business  of  insuring  against  these  war  risks — 
Documentarv  Evidence  of  the  nature  of  the  claims 


425768 


2 

prescntctl  by  this  Govi'num'iit  ;ii:aiiist  Kii^-laiid 
before  tlie  Tribunal  of  the  proceedings  liad  before  it 
and  of  the  natui-e  of  the  award  made  by  it  lias  been 
so  fully  set  forth  and  cited  in  the  printed  ariininents 
of  counsel  already  before  you,  that  it  would  seem 
needless  for  me  to  do  more  than  made  reference  to 
such  of  them  as  may  bear  upon  the  question  of  the 
obligation  of  the  United  States  in  relation  to  the 
distributiori  of  these  monej-s. 

From  my  reading  of  these  documents,  and  in 
listening  to  ihe  arguments  made  before  you  by 
representatives  of  all  claimants.  I  find  that  we  all 
substantially  agri^e  to  tlies*^  facts,  viz.,  that  the 
arbitiation  was  wJiolh/  iiifernatio)t(dm  its  charac- 
ter and  jurisdiction,  that  the  ])iincipal  claims 
against  (Ireat  Britain  were  based  upon  national 
(jrouiuhs,  consisting  of  the  alleged  rlolafion  by 
England  of  her  obUgatioii.s  as-  a  neutral  government 
towards  th(^  United  States  in  the  too  Itastij  recogni- 
tion of  a  state  of  belligerency,  which  was  tlie  prin- 
cipal and  initial  cause  of  all  the  losses  sustained  by 
any  of  the  claimants.  That  no  specific  claims  were 
adjusted.  That  claiins  of  inK/trirrifcrs  were  ex- 
pressly reserved.  \\u\.  tiiially,  that  a  sum  in  g/oss 
was  paid  as  damage  to  tlic  United  Sttttcs^  which 
that  Government  insisted  should  be  ])aid  disencum- 
bered of  every  trust,  and  with  full  ])ower  to  distrili- 
ute  it  amongst  its  citizens  wiio  suJD  r<(l  toss  as  it 
sliouUl  deem  ex]>edient  and  just,  and  to  which 
demand  England  acccdi <l . 

The  great  (piestion  then  for  Congress  to  determine 
in  the  distribution  of  the  icmaining  moneys  ])aid  to 
the  Ignited  States  by  (iicat  liiitain  unch'r  the  (leneva 
Awaid  is.  whether  it  is  at  liberty  to  iiMleninify  the 
loyal  citizens  of  America  for  actuat  /o.v.sv.v sustained 
bv   the  acts  of   the    CtMifederate    ci-ui.sers.    P>ritisli 


built,  or  receiving  aid  in  men,  armament  and  pro- 
visions in  British  ports,  or  whether  tliis  Government 
is  obligated  in  law  or  in  equity  to  pay  these  moneys 
to  corporations  tliat  have  made  large  j)rofits  in  the 
business  of  insuring  against  war  risks.  These  cor- 
porations are  the  only  claimants  before  you  who  are 
not  losers,  and  theii'  claims  are  resisted  by  all  others 
upon  this  ground  alone.  Tlie  claims  of  underwriters 
are  made  u])on  the  ground  that  the  Tribunal  found 
Great  Britain  liable  only  for  the  acts  of  the  Alabama, 
Florida,  and  Shenandoah  after  leaving  Melbourne; 
while  the  records  of  the  })roceedings  show  that 
nearly  all  of  the  cruisers  that  caused  the  damage 
for  which  redress  is  now  sought,  received  in  a 
greater  or  less  degree  aid  in  men,  armament  and 
supplies  in  British  ports.  The  Florida,  Alabama, 
Georgia,  Tallahasse,  Chickamauga,  and  Shenandoah 
were  British  built  cruisers,  three  of  which,  the  Ala- 
bama, Georr/ia,  and  Sltenandoali  were  never  in  a 
port  of  the  Confederates  States.  All  the  other 
vessels,  except  the  Boston,  Jefferson  Davis,  Sallie 
and  one  or  two  others,  /^f^fZ  received  aid  from  British 
subjects  in  British  ])orts.  The  claims  for  damages 
by  those  vessels  07ily  were  excluded  upon  the 
irround  that  tliere  was  no  evidence  to  sustain  them. 
The  damage  done  by  the  Alabanui  and  her  tenders 
reached  the  enormous  sum  of  $7,050,293.76;  by  the 
Shenandoah,  $6,656,838.81;  and  by  the  Florida, 
$4,293,869.60;  by  the  Chickamanga,  $183,070.73; 
by  the  Georgia,  $431,160.72;  and  by  the  Tallahasse, 
$830,841.83.  Thes(^  claims  were  subject  to  large 
reductions  including  prospective  earnings,  double 
claims  for  the  same  loss,  &c. ;  but  this  aggregate  of 
claims  ]n*esented  before  the  Tribunal  of  about 
$20,000,000  for  losses  occurring  by  the  acts  of 
British  built  vessels  will  show  how  diminutive  were 


tlie  losses  siistaijiocl  by  siicli  vessels  as  had  never 
reached  a  British  ])ort.  It  was  by  rensou  of  the 
plain  molation  of  tlie  duties  of  a  neutral  nation  in 
furnishing  this  aid,  that  Great  Britain  was  called 
to  account.  It  was  shown  that  her  too  prroipiiate 
recognition  of  heUigerent  rigJits  was  the  iniriatoiy 
and  real  cause  of  (til  these  losses. 

England  was  not,  therefoi-e,  excul])at('d  from  the 
payment  of  a  large  portion  of  tlicsc  claims  for  loss 
upon  the  ground  that  hci-  subjects  did  m)t  furitlsh 
the  Qnecins  of  destniction  in  lier  own  ports,  but 
upon  the  gi'ound  that  our  govcnimcnt  failed  to 
ojjiriaUn  notifij  her  of  the  acts  complained  of  in 
time  to  hold  her  responsible  as  a  nation  i\)r  permit- 
ting the  wrong. 

If  our  GovernuK^nt  was  at  all  in  fault  in  tliis 
res])ect  how  reasonable  tliat  in  accepting  a  gross 
sum  in  full  satisfaction  of  <iJl  t\u'  claims  now  repi-e- 
sented  before  this  Committee  and  presented  before 
the  Geneva  Tribunal,  it  shoidd  insist  u])on  the 
right  to  distribute  the  nu)ney  amongst  its  citizens 
according  to  equity  and  just  ic<\  thus  ])rotecting  all 
who  had  suff(M'ed  loss  before  gi-anting  (Ui;/  indemni- 
ty to  those  who  had  b(MMi  so  fortunate  as  to  realize 
to rgc  profits  hv  the  hazard  of  insurance  against  war 
risks. 

Mr.  l-'ish,  ill  his  letter  of  iiisl  nicl  ions,  says,  "''{"he 

''Pi'esidellt  desires  Die  to  lia\e  I  lie  sill  )ject  discussed 
''as  one  between  the  two  (loveriinieiits  •■        ''■•' 

""to  secure  \[  possilitt  the  award  of  a  sum  in  uross. 
''Anil  in  t  lie  I  rent  men t  of  t  he  entire  case  noii  will  be 
"cai'eful  itdt  to  commit  the  (io\'eriimeiit  aslotlie 
'*dis])osit  ion  of  \\\\\\\  may  be  a\varde(l.  Tlie 
''(^o^■erllment  wishes  to  hold  ils(ll'  free  tn  deride  ^-a 
"to  the  ritj/its  and  etoiins  of  insurers.  \\  the  \alue 
"of  the  pro])ei'ty  captured  oi'destroyed  l>e  recdxcn  d 


"in  the  name  of  the  Government,  the  distribution  of 
"the  amount  recovered  will  be  made  by  this  Govern- 
"ment  without  committal  as  to  the  mode  of  distribu- 
tion." It  is  not  denied  that  these  instructions  were 
received  by  the  counsel,  that  the  case  was  thus  pre- 
sented and  that  England  acquiesced  mt\\e  demand, 
and  a  sum  icas  aicardedm  gross  without  calculation 
as  to  any  item,  under  the  Ith  article  of  the  treaty, 
in  satisfaction  and  discliar ge  of  all  the  claims 
presented,  and  all  that  might  exist  on  behalf  of  the 
United  States,  or  its  citizens,  which  grew  out  of  the 
causes  which  had  to  the  arbitration.  Our  Govern- 
ment then  received  the  money  with  the  right  con- 
ceded to  distribute  it  as  though  it  came  from  its 
oion  Treasury,  disencumbered  of  any  trust  or  obli- 
gation to  disburse  it  amongst  any  particular  class 
of  claimants  and  entireh'  free  to  do  justice  to  all. 

Mr.  Cusliing,  counsel  for  our  Government,  in  his 
book  upon  Alabama  claims,  says : 

"  The  awaid  is  to  the  United  States,  in  conformity 
'•with  the  letter  of  tlie  treatv,  which  has  for  its 
"well-defined  object  to  remove  and  adjust  com- 
"  plaints  and  claims  on  the  part  of  the  United 
"States." 

"But  the  history  of  the  treaty  and  of  the  arbi- 
"  tration,  shows  that  the  United  States  recover,  not 
"for  the  benefit  of  the  American  Government  as 
"such,  but  of  such  individual  citizens  of  the  United 
"  States  as  shall  appear  to  have  suffered  loss  by  the 
"acts  or  neglects  of  the  British  Government.  It  is 
"  however,  he  says,  noi  2i>  special  trust  legally  af- 
'"''fected  to  any  iiarticvlar  claim  or  claimants,  but 
"a  general  fund  to  be  administered  by  the  United 
"  States  in  good  faith,  in  conformity  with  i\ie\vown 
"conceptions  oi  justice  and  equity,  icithin  the  range 
"  of  the  award.         *        *        Nor  does  the  tribunal 


6 

"  define  afRiniarively  //7/r// claims  should  be  satis- 
"fied  otherwise  than  in  the  comprehensive  terms  of 
"the  award,  wliioh  deelaics  that  tlie  sum  awarded 
"is  'the  indemnity  to  be  paid  hj  Great  l^iitaiu  to 
"  the  United  States  i'or  the  satisfaction  of  ali  tlie 
"claims  rcfei-i-rd  to  the  consideration  of  tlu^  ti-ibu- 
"nal,  conformably  to  the  provisions  contained  in 
"  article  VII  of  the  aforesaid  treaty."  He  further 
says.  "  The  aibitiators,  be  it  observed,  do  not  say 
"for  the  satisfaction  of  certain  specific  claims 
"  among  those  referred  to  the  consideration  of  tlie 
"tribunal,  but  of  ^ all  the  claims''  so  referred  con- 
"fornuibly  to  the  pi'ovisions  of  the  treaty." 

This  would  seem  to  be  a  fair  statement  and  view 
of  the  situation  of  the  fund  in  question  and  the 
doctrine  of  subrogation  invoked  on  behalf  of  un- 
derwriters has  no  application  to  the  case  ])resented 
before  you.  The  owner  of  tlie  property  destroyed 
by  the  Alal)ama,  Florida  or  Shenandoah,  has  no  in- 
terest in  the  fund  which  he  could  enfoice,  if  unin- 
sured, either  in  tlie  courts  or  by  inteinatioual  law. 
it  was  not  paid  as  ]iis  money.  The  (government 
refused  to  receite  it  as  SKcli.  yiie  ap])lication  for 
i-eli(-f  is  now  made  by  all  the  claiiniints  as  a  yraln ify. 
11"  a])|)i-opriate(l  it  ninst  l)e  (louer.r///v///V/  ;ind  u]ion 
no  other  ])rinci]>le. 

The  law  of  subrouiition  gives  tin'  insurer  who 
stands  in  tlu^  i-elation  of  surety  to  Ills  principal 
when  Jh'  pays  tlie  loss  the  right  to  the  ])ro])erty  in- 
snied  niter  abandonment,  as  also  the  /iy/it  of  nction 
against  a  wiougdoer  who  causes  the  loss.  But  it  is 
not  claimed  that  any  right  of  iictiou  acci-ued  to  the 
assy  red,  or  the  assiir<  r  foi-  llie  destriiction  of  this 
proi:)erty,  either  ayainst  (treat  Britain  or  an}'  one 
els(\  Ko  dictum  of  any  writei-  on  international 
law,  has  been  cited  to  that  elVect.      In  I'act   our  mu- 


nicipallaio  prohibits  the  maJdny  of  siicli  a  claim, 
and  any  claim  upon  this  nation  tlirongh  Congress 
for  in(l(Miinifieation  could  rest  only  npon  tlie  duty 
of  the  Government  to  protect  its  citizens  which  is 
answer<?d  in  this  case  by  the  fact  that  all  reasonable 
diligence  was  nsed  and  therefore  the  application 
must  be  ex  gratia  for  such  reparation  as  the  Govern- 
ment may  deem  proper  to  grant. 

The  decision  in  the  case  of  Comegys  v.  Ynsse,  (1 
Peters.  193),  and  kindred  cases  cited  in  behalf  of 
the  underwriters  to  substantiate  their  right  by  sub- 
rogation, w^as  based  upon  the  fact  that  by  the  7th 
ssction  of  the  treaty  with  Spain,  the  claims  of  tlie 
citizen  were  recognized.  The  treaty  recited  that  as 
the  municipal  law  was  inadequate  ''a  full  and  com- 
"  plete  compensation  will  be  made  by  the  British 
*' Government  to  the  com/plainants,''^  No  such 
provision  is  contained  in  the  treat}^  relating  to  Ala- 
bama Claims,  and  the  case  cited  is  not  an  authority 
establisliiiig  any  right  in  the  insurance  companies 
to  this  fund. 

The  com])anies  however  ask  you  to  apply  a  doc- 
trine whicli  a  court  could  not  enforce  in  order  that 
3^ou  may  do  a  gross  injustice,  viz.  to  add  to  their 
enormous  profits  at  the  expense  of  the  very  persons 
through  whom  these  profits  were  clerited  and  who 
have  not  only  lost  tlie  money  they  were  compelled 
to  ])ay  for  protection,  but  other  large  sums  in  the 
interuption  and  diversion  of  their  trade. 

The  question  which  yow.  are  free  to  determine  be- 
tween tliese  claimants  is,  whether  those  who  have 
lost  nothing  but  are  lai'ge  gainers  by  the  misfor- 
tunes of  others,  ought  to  be  paid  an  additional 
profit,  to  the  exclusion  of  persons  who  are  actual 
sufferers  and  losers,  and  who  liave  received  no  re- 
muneration for  their  losses.     This  is  the  precise  sit- 


8 

nation  and  relation  of  the  claims  of  the  numerous 
merchants  I  represent  to  those  of  tlie  underwiiters. 
If  it  be  said  that  the  payment  of  these  war  premi- 
ums was  a  measure  of  fear  or  coioardiee,  I  answer 
that  no  merchant  could  have  continued  his  buisness 
a  montli  without  insuring  against  war  risks,  he 
could  not  obtain  a  dollar  s  worth  of  goods  at  home 
or  abroad  on  credit,  without  a  clean  policy  against 
this  risk  for  the  benefit  of  his  creditor,  as  no  mer- 
cluinf  was  independent  of  credit. 

The  courts  early  decided  that  the  underwriter 
was  not  liable  for  loss  ujxm  a  ])olicv  for  marine 
risks,  when  the  loss  occuiicd  by  th<'  acts  of  Con- 
federate cruisers.  The  shipixn-  was  then  compelled 
to  insure  against  war  risks,  incivasiug  the  expense 
of  insurance  three-fold. 

It  has  been  said  that  t lie  iiKMcliaiit  paying  these 
excessive  rates  charged  them  in  the  cost  of  his 
goods  and  lost  nothing.  This  allegation  is  in  no  sense 
tru(.'.  A  large  ])ortion  of  the  American  carrying  trade 
was  transferred  to  neutral  bottoms  insured  atoidin- 
ary  rates,  as  these  vessels  were/'/Tc^  fi-om  danger  of 
capture,  and  coinpet'dion  through  this  channel 
refutes  the  idea  that  any  merchant  could  control 
the  maiket  "|)rice  of  the  world  \\\  hh  lirie  of  iin-r- 
fli((n(lisiii(/^  there  was  no  iiioiio])olizing  power  to 
that  extent  in  the  hands  of  any  one  who  noAv  makes 
claim  to  this  rnn<l. 

The  underwiiters  e\]ii-ess  their  williiigiiessin  ask- 
ing for  the  balance  <)r  this  fund  to  (-(mfine  them- 
s<'lv«'s  to  the  acts  of  the  Alabama.  Florida,  and 
Shenandoah  after  leaving  Melbonine  because  the 
Geneva  Tribunal  found  England  at  fanlt  as  i-egards 
these  vessels  only,  althongh  their  losses  l)y  all  the 
vessels  have  been  ]>rovided  for.  'V\\v\  claim  that 
the  money  was  paid  to  iudenmiry  the  persons   who 


lost  by  these  vessels,  wliile  the  other  claimants  are 
losers  by  all^  or  nearly  all  the  cruisers,  and  there- 
fore should  be  first  paid,  ignorino-  the  facts  that  the 
great  arbitrataion  was  chiefh^  constituted  for  the  set- 
tlement of  international  rights.  That  the  subject  of 
'//io/^c^ydanuige  was  incidental  va\i\  as  far  as  possible 
avoided  b}'  our  Government.  That  while  by  tlie  tenth 
article  of  the  treaty  assessors  might  have  been  ap- 
pointed to  prove  specific  claims,  the  money  was 
paid  as  a  gross  sum  under  the  seventh  article,  in 
satisfaction  not  of  insurance  claims  or  war  pre- 
■niiiun  claims,  (for  both  these  claims  were  rejected 
for  being  doubly  presented,)  or  any  particular  class 
of  claims,  but  of  any  and  all  just  claims  of  the 
nation  and  of  its  citizens,  with  the  right  of  distribu- 
tion ahsolutely  and  unqualifiedly  resting  with  our 
Government  to  which  it  was  paid,  and  while  actual 
sufferers  mighty  England  could  not  complain  even 
though  the  United  States  sliould  cover  this  money 
into  the  treasury  for  the  nation's  benefit. 

The  right  of  claimants  to  this  fund  does  not 
dep<-nd  on  the  question  of  the  negligence  of  the 
English  Government  in  letting  the  three  vessels 
escape,  but  upon  the  facts  that  all  the  vessels  that 
destroyed  the  property  and  created  the  losses,  did 
receive  aid  and  support  in  men,  2^^'o^'isions  and 
armament  in  British  ports;  and  but  for  this  and 
the  too  early  recognition  of  belligerent  rights  by 
Great  Britain  as  a  neutral  power,  all  these  evils 
would  have  been  averted. 

It  seems  to  me  that  the  plain  duty  of  Congress  is 
to  apportion  the  fund  amongst  these  claimants 
according  to  the  merits  of  each  case,  without 
reference  to  the  particular  acts  of  the  Alabama, 
Florida,  or  Shenandoah,  if  his  claim  arises  from  the 
act  or  acts  of  any  vessel  receimny  aid  from  British 


10 

porlx.  it  was  tlic  duty  ol'  our  (lovcnimciit  to  pro- 
tect the  persons  and  property  of  its  citizens  while 
eno-nged  in  lawful  commerce  upon  tlie  high  seas  to 
tlie  cxtcMit  of  its  ])ower.  Its  inahilUy  to  do  so  was 
a  sou  ICC  of  regivt  and  niortilication,  and  the  wrongs 
that  its  citi/cns  have  suif<M-ed  by  this  inability  and 
which  have  thus  far  gone  nnrcdi-csscd,  may  now  be 
repaired  by  the  Just  distiibutiou  of  the  money  paid 
by  England  as  pai't  rc]>aration  for  her  wrongs. 

The  actual  suffcrcj-s  now  asking  to  be  paid  their 
losses,  are  the  persons  who  were  com])cll(Hl  to  |)ay 
lar(/e  sums  for  tlie  protection  of  their  pio])erty  as  I 
have  stated,  and  tliose  who  have  suffered  in  the 
class  represented  by  Mr.  Metcalf,  through  the  acts 
of  vessels  other  than  the  Alabama,  Floiida,  and 
Shenandoah,  and  while  his  loss  was  caused  by  the 
actual  destruction  of  his  property  which  was  unin- 
sured, he  choosing  to  take  a  risk,  the  class  of  claim- 
ants I  represent  couXd  not  iake  tlie  risk  and  icere 
compelled  to  2)ay  for  %>rotectioii;  both  are  losers  of 
aiuounts  clearly  ascertai uahl y  \\\\y\  equally  entitled 
to  be  ])aid  from  this  fund. 

Section  12  of  the  act.  distributing  a  portion  of  the 
fund,  pro\  ides  loi-  the  ])ayinent  of  all  rrr7//r// losses 
by  undericrilers  through  the  acts  of  any  and  all 
cruisers  icitJioiit  limit,  and  those  who  have  thus 
(Read  sec.  12,)  lost  by  insuring  have  ])roved  their 
claims  before  the  court  constituted  by  the  act,  and 
we  ask  to  be  ])rovided  foj-  in  the  same  manner,  de- 
ductinrf from  oiii-  chiiins  all  dlridends  from  profits 
we  may  have  leceived  from  the  underwi'iters.  A 
court  lias  been  established  undei-  the  act  and  now 
exists  to  pass  u])on  the  merits  of  all  claims  ccmiing 
before  it.  We  ulm  have  ])aid  war  premiums,  ask 
to  be  permitted  to  go  before  that  court  and  |)rove 
and  collect  these  claims  without  the  intervention  of 


11 

jiiiy  of  tliese  companies,  oi'  tlieir  attorneys,  as  our 
guardians  or  legal  advisers.  The  luxury  is  too  expen- 
sive to  be  profitable,  and  too  uncertain  to  he  desira- 
ble. A  mutual  company  is  composed  of  its  policy- 
liolders.  It  has  no  capital  but  that  paid  in  as 
premiums.  Tiie  officers,  clerks,  rents  and  other 
expenses  are  paid  from  this  fund.  It  belongs  en- 
tirely to  the  policy-holder,  and  anything  the  com- 
pany receives  as  a  revenue  is  payable  to  the  premium 
pa^'ers.  You  are  told  by  the  legal  representatives 
of  these  companies  that  as  a  comj^any.,  they  have 
nothing  to  do  with  tlie  moneys  they  shall  recover  as 
losses,  but  to  ^j'rtj/ them  to  the  policy-holders  who 
paid  the  premiums  when  the  losses  occurred  less 
the  legal  and  other  indefinite  expenses,  but 
that  they  are  entitled  to  receive  them  so  as  to 
disburse  them  to  the  holders  of  policies  of  marine 
as  well  as  loar  risks,  and  claim  the  right  to  collect 
these  moneys  as  staJie-holders,  so  as  to  protect  the 
rights  of  the  persons  having  marine  risks;  and  jet 
it  is  conceded  that  those  mutual  companies  made 
more  money  in  profits  fiom  the  tear 2yremiu77is  re- 
ceived than  from  those  paying  marine  risks. 

More  than  eigJit  millions  of  dollars  of  war  pre- 
miums have  been  paid  to  underwriters,  while  their 
losses  under,  these  risks  are  but  $5,569,497.58,  from 
which  they  made  a  proht  of  more  than  $2,000,000, 
a  i)urti()n  of  which  was  paid  back  as  profits,  which 
accounts  for  the  fact  that  but  $6,146,219.71,  of  war 
premium  claims  have  been  filed,  the  Atlantic 
Mutual  of  New  York,  paying  forty  per  cent,  divi- 
dends from  its  profits  while  the  war  risks  continued. 

Tli(3  aogregate  profits  of  maiine  insurance  were 
larger  during  the  war  than  during  any  like  period 
before  or  since,  proving  conclusively  that  in  the 
distribution   of  profits   among   the   policy-holders, 

,  425768 


V2 

the  liolders  of  marine  risks  have  received  more  than 
their  fair  share  of  ])rofits.  Oug-lit  tliis  unequal 
distribution  to  be  continued  i  Tlie  holder  of  a 
policy  for  ordinary  marine  risk  has  no  claim  before 
you.  He  suffered  no  loss  by  tlie  acts  of  these 
cruisers  uiiadjusted,  and  because  he  was  a  sharer  in 
profits  from  a  common  fund  to  ?iis  advantage  ex- 
tends his  right  only  to  a  settlement  which  has  taken 
place  upon  the  basis  of  moneys  nn-eived  by  the 
companies  in  premiums  and  disbursed  by  them  in 
losses  paid.  They  are  not  losers  in  any  sense  which 
entitles  them  to  receive  any  ])art  of  the  fund  in 
question. 

What  rl( fid  of  guardiansliip  liaie  the  mutual 
companies  in  the  collection  of  these  war  premiums  i 
Every  liability  under  the  policy  ceased  more  than 
ten  years  ago.  The  single  right  of  the  policy- 
holder to  receive  scrip  dividends  and  profits  from 
the  companies  made  from  the  receipt  of  these  pre- 
miums has  been  satislied  by  such  2)ayment,  and  the 
policy  has  no  longer  any  binding  for(;e  or  effect  as 
between  the  assurt'r  and  assurt^d.  Tliepeisons  who 
are  entitled  to  I'eceive  this  money  from  the  compa- 
nies asking  for  it  are  the  re])reseiitatives  of  tlu^ 
companies  and  if  the  mutual  com})anies  had  a  ])rior 
right  to  the  fund  the  r«nil  owners  are  entitled  to 
receive  it. 

The  a])i)lication  to  Congress  to  indemnify  the 
persons  who  paid  these  war  premiums  and  its  action 
in  regard  to  it  being  ])urely  ex  gratia  growing  out 
of  no  legal  right.  Legislation  creating  the  right 
restores  no  rights  or  obligations  to  or  against  either 
party  under  the  policy  of  insurance,  and  the  com- 
pany is  in  every  legal  sense  a  stranger  to  the  riglits 
and  interests  of  these  peVsons  which  they  may 
acquire  by  the  legislation  asked  for,  to  the  fund  in 
question. 


13 

For  the  reasons  stated  I  respectfully  J>sk  tlint  the 
merchants  who  have  paid  these  wai-  ])i'(Mniiims  and 
for  whicli  they  have  received  no  reiiiinit'ration 
whatever,  and  by  tlie  payment  of  Avhicli  I  lie  insu- 
rance companies  were  enabled  to  declare  large 
dividends  and  largely  incr(nise  their  business,  shall 
be  by  you  consideicd  as  being  with  other  (iciual 
sufferers  oi  loss  Jlrsf  entitled  to  be  paid  from  the 
Alabama  claims  fund  which  may  remain  after  the 
payment  to  the  nnderwriters  of  all  their  actual 
losses  as  provided  for  in  section  12  of  the  Act  of 
1873,  relating  to  the  Geneva  Award,  now  in  force. 


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